Why the US Should Moderate Its View of Indonesia

November 12, 1997

By David D. Newsom

Recognizing the importance of financial stability in Southeast Asia after recent turbulence in the markets, the United States, on Nov. 1, joined in supporting a package of international assistance to Indonesia.

Multilateral lending agencies - the International Monetary Fund (IMF), the World Bank, and the Asian Development Bank - supplied $18 billion of a $35 billion package. The remainder came from the US, Singapore, Japan, Malaysia, and Australia. Washington's share was $3 billion.

Given Washington's recent criticism of Indonesia and a cooling of relations between the two, US participation was courageous - but justified, if the Southeast Asian nation is seen in perspective.

The US image of Indonesia, the world's fourth most populous country and the largest Muslim nation, has been tarnished in recent years. Jakarta's take-over and sometimes brutal rule of East Timor have dominated that image.

President Suharto, his family, and cronies are viewed as an undemocratic oligarchy dominating politics and commerce for their own benefit. The lack of a clear pattern of political succession breeds uncertainty about the future.

US-Indonesian relations were further strained when Mr. Suharto cancelled the purchase of F-16 aircraft and terminated a long-standing military training program. If these were not sufficient causes for caution by US political leaders, allegations that an Indonesian businessman close to President Clinton had tried to influence US policies through campaign gifts placed relations in the spotlight.

But there are other parts to this picture. Indonesia, as much as any developing country, has over many years demonstrated conscientious diligence in using resources wisely and furthering development. When a brilliant group of US-educated technocrats assumed charge of the economy in 1966, they set the country on a remarkable path of development, using oil revenues constructively for rural and social improvement. Indonesia, in recent years, has been able to control inflation, maintain high rates of savings and investment, and reduce substantially the incidence of absolute poverty.

Further, the technocrats have demonstrated the courage to confront President Suharto on economic issues, even when his family and close associates were involved. The president has had the courage to accept their advice. In the early 1970s when Pertamina, the national oil company, went heavily into debt, strong actions were taken, even though the head of Pertamina was a close friend of the president. Under the newest agreement with the IMF, 16 weak banks will be closed, including at least one owned by Suharto family members. Prospects for the country's recovery from the present crisis are good.

Although the Indonesian government effectively prohibits political dissent, the authorities are not indifferent to human rights issues. Quiet diplomacy can be effective, as it was in the mid-1970s when, under foreign encouragement, Indonesia released some 30,000 persons detained after the events of 1965 that brought Suharto to power.

In an era of worldwide concern about Islamic fundamentalism, this Muslim nation consistently has opposed Islamic extremism within its own borders. Similarly, it is a voice of moderation on the global stage.

Despite recent events, the Jakarta government has a long record of quiet assistance to US naval and air deployments in the region, including the sharing of intelligence on matters of mutual interest. Diplomatically, Indonesia has been a constructive participant in the resolution of regional disputes. It assumed a leadership role in brokering the end of the civil war in Cambodia and subsequently played an active part in seeking to bring about reconciliation among Cambodia's feuding leaders. Indonesian diplomats helped bridge the gap between the developed and developing countries on international economic issues and in negotiations on the Law of the Sea Treaty.

The Clinton administration, in welcoming the visit of President Jiang Zemin of China, placed the deep differences that exist over human rights and political philosophy in a wider perspective, finding areas of common interest. A similar balance of judgment would be equally appropriate in relations with Indonesia

* David D. Newsom, former undersecretary of state, is Cumming Memorial Professor of International Affairs at the University of Virginia.